The jury is back on this one. Fortune 500 companies with a higher representation of women board directors attained significantly higher financial performance than those with the lowest representation of women board directors, according to Catalyst’s recent report, The Bottom Line: Corporate Performance and Women’s Representation on Boards.
Look around you: Business women awards are crowded affairs; there are many women in business scripting success stories. And for women in the corporate and business worlds, things seem to be going up and up.
Or, are they? Statistics continue to show a sharp fall in the proportion of women employees from the entry level (50%) to the middle (30%) and senior management (8%). The funnel seems to be definitely sifting out women en route to the top. So, why are companies now falling over themselves to hire senior women?
Plain and simple: Talent is short—across gender, culture, race, and experience. The funnel is widening: Studies done by an IT multinational show that only 30-40% of the leadership talent will come from the traditional male manager of the present.
Diversity across the workforce helps the company respond better to business reality and be more agile and responsive, as a representative workforce truly represents the market. Decision-making is far more global, more thorough and inclusive, and this positively impacts profits.
Opportunities are staggering—both as an offshoring destination as well as a domestic market. The entry of multinationals such as IBM Corp., Cisco Systems,Inc., Motorola Inc. and General Electric Co. has meant more opportunities for women, besides the adoption of the best global practices in Indian workplaces.
Companies are also discovering that women leaders have a higher degree of loyalty and traction, in addition to multitasking.
MNCs in India, and now Indian companies too, are rapidly internalizing best practices to stay ahead in the talent race. In quite a few firms, hiring executives are rated on the diversity ratio during annual assessments. They are expected to also provide adequate mentoring, career opportunities and internal options to women employees.
For global search firms such as ours, too, things have changed. Not only have hiring companies become more empathetic about career breaks, they expect the searches for senior positions to adequately cover women candidates.
Many times, companies specify a preference for a woman candidate. We have started looking at breaks in career as part of a life exercise, rather than a lack of seriousness or commitment. Certainly, all these steps point in the right direction.
The author is vice-president, Stanton Chase International, an executive search consulting services provider.